The considerable ownership by private companies in Mainstreet Equity indicates that they collectively have a greater say in management and business strategy
A look at the shareholders of Mainstreet Equity Corp. ( TSE:MEQ ) can tell us which group is most powerful. With 41% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
As market cap fell to CA$1.5b last week, private companies would have faced the highest losses than any other shareholder groups of the company.
Let's take a closer look to see what the different types of shareholders can tell us about Mainstreet Equity.
What Does The Institutional Ownership Tell Us About Mainstreet Equity?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that Mainstreet Equity does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Mainstreet Equity's earnings history below. Of course, the future is what really matters.
earnings-and-revenue-growth
Mainstreet Equity is not owned by hedge funds. Our data shows that Pan Pacific Mercantile Group Inc. is the largest shareholder with 41% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.4% and 5.3% of the stock. Navjeet Dhillon, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer. Although it should be noted that Navjeet Dhillon is also the Founder and CEO for Pan Pacific Mercantile Group Inc.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Mainstreet Equity
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
We can see that insiders own shares in Mainstreet Equity Corp.. This is a big company, so it is good to see this level of alignment. Insiders own CA$117m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mainstreet Equity. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
Our data indicates that Private Companies hold 41%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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